401k withdrawal calculator

401k withdrawal calculator

401k withdrawal calculator: Part of planning your retirement budget anticipates what your income is your needs and possible sources of income. To do that, you must estimate the growth of what you contribute to your retirement plan, such as 401k. Like most 401k plans are invested in mutual funds fluctuating, calculate your retirement savings is really the best of conjecture.

401k withdrawal calculator

Investment advisers use what is known as the Rule of 72 to estimate the growth of long-term assets periods. Rule 72 has an expected or anticipated performance and splits it into the number 72, based on overall figures of compounding. The result is the number of years it will take to double your wealth. For example, if a return of 8 per cent per annum is expected in your purse, your money will double every nine years. Of course, this assumes that the portfolio reaches the expected returns.

Using rough estimates is fine to give a general understanding of how your portfolio should perform. Assuming you put $ 10,000 in your 401k with interest rate of 8 percent, with another 25 years before retirement, the $ 10,000 would double 3,125 times in 25 years. In monetary estimates it is $ 67,500. The problem with this estimate is not put $ 10,000 in once and then never see again. You contribute regularly so estimates must conform to the regular contributions. The future value of an annuity formula is used to determine these estimates.

The equation for the future value of an annuity is: FV = PMT [((1 + i) ^ n-1) / i]. Each variable is defined as PMT and the amount of each payment, i is the anticipated interest and n is the number of periods that represent ^ n is an exponent. With $ 10,000 per year at an interest rate of 8 percent for 25 years looks like this: FV = $ 10,000 [((1 +0.08) ^ 25-1) / 0.08]. Your retirement assets under this scenario is $ 731,059.39.

There are many calculators that do the work for you with these estimates. Going to places like, or even regulatory agencies such as the Regulatory Authority for the Financial Industry. These 401k withdrawal calculator take the exact amount you put in each year or month and estimate both what you need and expect to win. These calculators are a great tool to fine tune the amount you contribute monthly and annually.